1st February 2017
FTSE 100 Support 7130 7129 7115 7094 7063 7053 7043
FTSE 100 Resistance 7147 7153 7162 7180 7250
Good morning. Well I wasn’t quite expecting it to rise to test 7165 I must admit, as the resistance around 7150 looked pretty decent. But once it had tested that level the FTSE 100 fell pretty hard down to 7100 and we have since had a bit of a bounce from there. Apple reported last night and beat expectations. I expect the other mainstays (Facebook, Google, etc) will be the same. I was sort of expecting the bulls to push a bit higher once they managed to get to 7165 to test Fridays closing price at 7185 but they seems to stall at the 7165, the rise was a bit strange, mostly fuelled by the fall on cable (GBPUSD) – as that rose back later in the day then the FTSE fell back. The value of the pound climbed as high as $1.2593 against the dollar after the US president heavily criticised China and Japan for “play[ing] the money market”. Germany were also in the firing line, as Mr Trump’s trade chief, Peter Navarro, accused Berlin of using a “grossly undervalued” euro to “exploit” the US and the rest of the EU.
For today there is 10 day Bianca resistance at 7153 so the bulls will be keen to push above this, though the bears will be keen to break 7095. As its also the first of the month we “usually” get an initial rise as the new months money comes into funds etc. So maybe another rise and dip day again, similar to yesterday. It’s looking fairly positive at the moment.
FTSE 100 Outlook and Prediction
As mentioned above I am expecting a bit of a rise and dip day again, as the start of the new month often sees an initial rise. With the bearish activity yesterday, admittedly helped by the pound, I am still thinking that we will get a dip down to 7000 at some point over the next few sessions, but the bears will need to break 7080 for that.
Today I am looking at resistance at 7153 initially where we have the 10 day Bianca channel, then Fridays closing level of 7185, both levels are worth a short from. We have had a decent overnight bounce from the 7100 test last night, but it could just be more of a dead cat one within a bigger decline. If 7185 holds as resistance, and with the FTSE dropping below 7135 yesterday, the bigger picture still looks bearish and a short from that level could yield 100+ points. I will try a short at the 10 day channel first though but if it doesn’t react quickly I would say that the FTSE is likely to push higher to the 7185. If that breaks then 7220 and 7285 are likely upside target areas, With gold back above 1200 and cable wanting to build on its gains around the 125 level I think there is a higher chance of more bearishness on the FTSE.